Computer hacker Gary McKinnon has won his 10-year fight against extradition after Home Secretary Theresa May stepped in to halt proceedings.
Mrs May stopped his extradition on human rights ground after medical reports showed the 46-year-old was very likely to try to kill himself if extradited.
McKinnon was accused by US prosecutors of "the biggest military computer hack of all time", but he claims he was simply looking for evidence of UFOs.
Mrs May said the sole issue she was considering was whether "extradition to the United States would breach his human rights". There was no doubt McKinnon is "seriously ill" and the extradition warrant against him should be withdrawn, she said.
It is now for the director of public prosecutions Keir Starmer QC to decide whether he should face trial in the UK, Mrs May added.
A so-called forum bar will also be introduced to extradition proceedings to enable a UK court to decide whether a person should stand trial in the UK or abroad, Mrs May added. It will be specifically designed to ensure it does not fall foul of "delays and satellite litigation", Mrs May told MPs.
Home Office medical evidence showed McKinnon was very likely to try to kill himself if extradited to the US, where he faced up to 60 years in prison if convicted. The US stance also appeared to soften this summer, with government adviser John Arquilla saying they should be recruiting elite computer hackers to launch cyber-attacks against terrorists instead of prosecuting them.
McKinnon, from Wood Green, north London, was arrested in 2002, and then again in 2005, before an order for his extradition was made in July 2006 under the 2003 Extradition Act. That triggered three successive applications for judicial review and questions about the fairness of the UK-US extradition treaty, which critics claim is one-sided.
McKinnon's MP David Burrowes said: "Today is a victory for compassion, and pre-election promises being kept."
Shami Chakrabarti, director of civil rights group Liberty, said: "This is a great day for rights, freedoms and justice in the United Kingdom. The Home Secretary has spared this vulnerable man the cruelty of being sent to the US and accepted Liberty's long-standing argument for change to our rotten extradition laws."